Weekly wages have risen by just £16 in 14 years when inflation is taken into account, according to an investigation by living standards think tank the Resolution Foundation.
Workers have experienced an “unprecedented” pay cut since 2010, with real weekly pay growth of £16 due to two crises and Brexit, the foundation said.
The sum influences price increases over the period.
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Slow wage growth
Economic challenges in the form of the financial crisis of the late 2000s and the current cost of living crisis coupled with the economic effects of Brexit acted to suppress wage growth, he said.
It is a significant slowdown on the increases seen in the 14 years to 2010, when wages rose by £145 a week. It is also small compared to other large economies.
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If wage growth had been at the level of Germany and the US, people would have earned £3,600 more a year, the equivalent of £69.23 a week.
While wages he was rising faster what inflation in recent months, they have not been high enough to overcome a period of almost two years in which the price of goods rose faster than payment packages.
Although the latest official inflation reading showed prices rose 2% and wages rose 6%, price increases fueled by high energy bills following the invasion of Ukraine were eroding the benefits of wage increases.
Those high energy The costs followed pandemic-era price hikes after lockdowns caused problems in product supply chains. Households have been struggling with high bills, especially since energy bills soared in the first few months of 2022.
Improvements for the lowest paid
Wages, however, rose most for lower earners as the minimum wage was raised, the Resolution Foundation said.
Those in traditionally low-paying jobs, such as cleaners, bar staff and store workers, have seen their typical hourly wage increase in relation to inflation and is now 20% higher than it was in 2010. It is significantly higher than typical wage growth across the workforce, which is 1.6. %, said the think tank.
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An increase in the minimum wage in 2016 was credited for this.
It resulted in hourly wage inequality between low- and middle-income workers reaching its lowest level since the mid-1970s.
O minimum wage it is now one of the tallest in the world, the foundation added.
Job gains and losses
Gains have also been made in the number of people working in the UK, although it is one of just six countries in the Organization for Economic Co-operation and Development (OECD) group of nations that has not yet returned to its pre-pandemic employment. to assess.
Of the 38 OECD countries, only the United Kingdom, Latvia, Iceland, Chile, Colombia and South Africa have fewer people in employment than before the COVID-19 pandemic outbreak.
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